In business – and in life – it’s easy to want the best of both worlds.
But it’s a bit different when it comes to running a successful company. You’ll want to focus on only the best path forward.
And there’s no decision more important to make than who you sell to: other business owners, or the general public?
In this guide, we’ll break down the pros & cons for both so you can make an informed decision.
Harnessing The Power Of Business To Business
There’s no doubt about it: the B2B world is certainly lucrative for ambitious companies.
Plus, it’s been rapidly growing for the last few decades and shows no signs of slowing down.
Advances in technology especially have made this previously exclusive industry much more accessible.
But, you’ll need to spend a lot of time getting to know your potential customer. Eccomerce tends to take a backseat here in favor of lead generation strategies.
Advantages:
1. Selling to other businesses makes a lot of sense for a lot of companies: you’ll be working with professionals who typically have bigger budgets.
2. B2B relationships tend to be made for the long term. You won’t need to worry as much about trends and market analysis.
3. Networking in the B2B world is huge. If you already have a network then you can definitely take advantage of it. Moreover, once you do a good job, a client – who is also a business owner and knows the value of referrals – is more likely to recommend you to others.
Disadvantages:
1. Getting new B2B clients is typically more expensive than B2C. This is on account of the significantly lower population of business owners vs regular customers
2. B2B clients are noticeably harder to win over than regular customers. They will require more time & effort to sign on, as their stakes are typically bigger.
3. B2B clients require more ongoing attention than B2C. Seeing as you will likely have a long term working relationship with them, they will regularly be in contact with you.
The Classic Business To Customer Is Still Just As Powerful
Selling directly to the public is the most popular option for most businesses.
In recent years, E-commerce – especially with websites like Shopify – have allowed almost anyone to set up an online store and start making money in under a week.
Advantages:
1. Once you find the right rhythm, a B2C company is almost infinitely scalable, due to the sheer size of national & global audiences.
2. Typically, B2C customers are happy once their order is complete. You will not need to worry about ongoing maintenance in most cases.
3. The audience size of B2C is almost limitless. You can test selling as many services and products to as many different types of audiences as you need.
Disadvantages:
1. The B2C market is highly saturated due to the ease of access. You’ll be facing numerous competitors no matter what industry or niche you enter.
2. B2C is infamously trend-oriented. What might work this year may fail catastrophically next year, unless you stay ahead of the market.
3. Over 60% of B2C businesses will fail in their first three years. There is no single reason for this, but one of the biggest is being ill-prepared. Make sure you have all your chickens in a row before launching!
How To Make Both Work
It can be tempting – and possible – to try and make your business work in both B2C & B2B sectors.
But it’s a very challenging endeavor.
Your best bet is always to split your business, product, and teams into B2B and B2C groups.
Because it’s very unlikely that one product or service will fit both a business owner and an everyday customer.
This lets you pursue strategies totally unique to your prospective audiences, rather than trying to make a one-size-fits-all strategy work (it usually doesn’t.)
Whichever Path You Choose, Don’t Forget The Power Of An Accountant
Finding the right model for your business can be a tricky and very serious decision. But once you’ve made it, you rarely need to look back!
In order to keep you focused on your journey ahead, the last thing you need is to be constantly checking your assets vs liabilities, payroll, and a whole host of other tasks.
So let an A Firm bookkeeper & accountant help you out today! We’re now offering a free meet and greet with our CEO – book yours now.